The FCC is seeking comments on a request to extend the build-out deadlines for several Upper 700 MHz A Block licensees. Under current rules, Upper 700 MHz A block spectrum licensees must satisfy network build-out obligations by demonstrating that they are providing “substantial service” by no later than June, 2019. The petitioners in this case have asked the FCC to extend the construction deadline by an additional three years until 2022, and have also asked the FCC to permit the use of a device-based coverage proxy in lieu of a population-based coverage test for measuring compliance with the substantial service test. The FCC’s Public Notice seeks comment on the parties’ request for waiver and for clarification of the test. Initial comments are due September 6, 2017, and reply comments are due September 21, 2017.
To ensure that spectrum licensees make use of the licensed spectrum, the FCC requires licensees to build-out networks to cover significant portions of the population. Licensees demonstrate compliance with this requirement by making a showing of “substantial service” prior to the renewal of their licenses. The challenge for Upper 700 MHz A Block licensees is that the agency’s substantial service standard is somewhat of an amorphous benchmark, as it is defined in Section 27.14 as service which is “sound, favorable and substantially above a level of mediocre service which just might minimally warrant renewal.” The FCC will not grant a renewal of an Upper 700 MHz A Block license unless the substantial service standard is met. Moreover, according to the FCC’s rules, “failure by any licensee to meet this requirement will result in forfeiture of the license and the licensee will be ineligible to regain it.”
In 2009, several Upper 700 MHz A Block licenses were issued for 10-year terms and are up for renewal in 2019, meaning that licensees must soon demonstrate substantial service. Since the Upper 700 MHz A Block licenses did not include any interim “deployment milestones,” licensees are now charged with the task of evaluating whether they meet the substantial service standard pursuant to Section 27.14. The petitioning parties have asked the FCC for relief from the impending deadline because of the time and costs of migrating existing voice and data systems to the 700 MHz network. In addition, the petitioning parties have asked the FCC to clarify that they may satisfy the substantial service test by using network-connected devices as a proxy for calculating the population coverage of the planned 700 MHz network.
In 2007 the FCC released an Order that provided some explanation of the substantial service requirements. The FCC stated that it “expect[s] that licensees will take these construction requirements seriously and proceed toward providing service with utmost diligence. As such, [the Commission] do[es] not envision granting waivers or extensions of construction periods except where unavoidable circumstances beyond the licensee’s control delay construction.” Consequently, if the FCC decides to grant the parties’ request for extension or waiver of the substantial service requirements it would amount to a notable departure from the FCC’s stated policy. However, should the FCC grant the requesting parties relief from demonstration of the substantial service requirement, additional Upper 700 MHz A Block license holders could likely request and be awarded the same, or similar, relief. Therefore, the opportunity to provide comment in response to the FCC’s Public Notice on this issue presents a rare opportunity for any Upper 700 MHz A Block license holder that has concerns that it may not be able to demonstrate substantial service in time to meet the license renewal deadline.